Under Armour slides 10% despite market-beating results: how come?

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Under Armour Inc (NYSE: UAA) on Friday reported market-beating results for its fiscal fourth quarter. The stock still slipped 10% after the sports equipment company warned the impact of COVID-related supply constraints could be bigger than previously estimated.  

Highlights of the Q4 earnings report

Under Armour said its net income printed at $109.7 million that translates to 23 cents per share. In the comparable quarter of last year, it had posted $184.5 million in net income or 40 cents per share.

On an adjusted basis, the company that manufactures footwear, sports and casual apparel earned 14 cents per share. At $1.529 billion, Under Armour noted an annualised growth of 9.0% in its quarterly revenue.

According to FactSet, experts had forecast 14 cents of adjusted EPS on $1.469 billion in revenue. Under Armour noted a 15% growth in Q4 revenue from North America and a 3.0% increase internationally.

Guidance for the transition period

Last year, the U.S. firm said it’s moving the end of its fiscal year from December 31st to March 31st. For the transition period from January 1st to March 31st, the NYSE-listed company raised its guidance for a 5.0% increase in revenue on up to 3 cents of EPS.

Its outlook for revenue assumes a 10% hit from the COVID-related supply constraints. FactSet has not compiled a consensus for the three-month transition period. In the earnings press release, CEO Patrik Frisk said:

As we navigate ongoing uncertainty, going forward, I’m confident that we’re running a strong company – one that’s able to deliver sustainable, profitable growth and value creation for our shareholders over the long-term.

Last month, Baird said UAA could climb to $32 a share – an 80% increase from here.

The post Under Armour slides 10% despite market-beating results: how come? appeared first on Invezz.

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